Google Case Analysis E-Business Module 2010, RKC Introduction In just little over a decade, Google has become one of the biggest corporate conglomerates in the Internet and business world. In fact a lot of statistics are ranking it as the Top Brand for 2010. This idea was first born in the dorm room of two PHD students –Larry Page and Sergey Brin and grew to gigantic proportions. Google set out to take over the world! The case analysis attempts to propose solutions for Google to keep its growth pace and point out potential dangers ource: Milward Brown’s report on Top 100 Most valuable global brands 2010. Industry Background In the early days of the World Wide Web, performing a simple search was a pretty hard technological challenge. Companies like Yahoo were using human indexing for web pages, which of course became obsolete due to the exponential growth of the web. Today, Google conceives of “search” as something much broader and more grandly ambitious–no less than helping people access, analyze, organize, understand all the world’s information.
That kind of ambitious long-term challenge is really exciting and inspiring to the most technically brilliant minds. Making money and achieving professional status are significant for them, of course, but so are the moral and altruistic rewards of the work itself and helping the community and civilization. Company history Google was incorporated on September 4, 1998. The founding of Google one of the legends of Silicon Valley. The company attracts a lot of interest even visits from movie stars like Gwyneth Paltrow and ex-Presidents like Jimmy Carter.
A thousand people apply for jobs at Google every day. Page |2 Google Case Analysis E-Business Module 2010, RKC In 1995, Page and Brin were students for a PHD in computer science at Stanford with a strong interest or roller-hockey and computers. Brin is the talker, the more extrovert of the two–originally from Moscow, he trained on the trapeze and even considered joining the circus. Born in 1973, Moscow, Russia, Sergey Mihaylovich Brin’s family immigrated to Adelphi Maryland when he was six for reasons of anti-Semitism.
He was exposed to math and science from an early age as Sergey’s father Micheal, was a professor in mathematics in the University of Maryland and his mother, Eugenia, was a scientist at NASA’s Goddard Space Flight Centre on projects relating to climate and weather forecast. She was later diagnosed with Parkinson disease (in 1998). As children Sergey and Larry attended the same school, but Sergey graduated from University of Maryland with an honors degree in mathematics and computer science.
They met again at Stanford University and Sergey achieved his master’s degree with Larry in computer science and concentrated on Google since then. Currently he holds the position of president of technology at Google. Larry Page was born on 26th March, 1973 in Michigan, U. S. A, His father, was a professor of computer science and artificial intelligence at Michigan University. , so he too had the tremendous opportunity of having been surrounded by computers and science magazines since he was six.
Larry also admitted that his early access to computers and his curiosity narrowed his interest in invention and technology. Larry earned his bachelor’s degree with honors in computer engineering from University of Michigan and then earned his Master’s degree in computer science from Stanford University leaving him with his focus on Google of which, he is currently the president for product. Google started as a project for Brin and Page on devicing a better search engine initially names Backrub, and it is said that the two initially funded it by their credit card.
Brin and Page observed that popularity of a page, if it was referred to by other pages meant importance in an era where the page ranked according to how often the keyword was repeated in it. , popularity mattered–and soon Brin and Page gained momentum. The project generated a lot of interest from investors. Sun Microsystems co-founder Andy Bechtolsheim wrote a check of 100000 USD when he was presented the demo of the algorithm in 1998, one month before the company was incorporated. In 1999 top venture capitalists Kleiner Perkins and Sequoia Capital invested $25 million.
Soon after, Yahoo contributed $10 million. The company and software was renamed Google — a play on the word “googol,” a mathematical term for the number represented by the numeral 1 followed by 100 zeros. The use of the term reflects their mission to organize a seemingly infinite amount of information on the web. Page |3 Google Case Analysis E-Business Module 2010, RKC The first revenue stream of the company was derived from licensing the search service to other sites and it was very modest. The board pressurized Brin and Page to hire a professional, which they did- Mr.
Eric Schmidt. Mr. Schmidt came with the perfect background- he had a Ph. D. in computer science and a run as CTO of Sun, moreover he had leadership experience too–he had just spent four years as CEO of networking pioneer Novell. Corporate Culture Compared to traditional organizations, Google’s management has developed and applied techniques to efficiently reduce stress levels in their organizations and improve operational dynamics. According to Fortune magazine, for the past 3 years Google is “One of the Best Places to Work For” (Google, 2010).
Google offers their employees a large number of free perks at each of their corporate offices including a variety of cafeterias with day cares, professional chefs, modern exercise facilities with personal trainers and nutritionists, and employees are even allowed to bring their pets to work. Google is carefully and continuously attracting the best talent pool of IT professionals. By offering these type of incentives Google hopes to maintain stress levels low, attract and retain loyal employees. When he was hired by Google, Mr.
Schmidt was almost old enough to be Brin’s or Page’s father, so he was not threatened by the two and was not interested to compete with them. Google was created as “an island of idealism where people are more concerned with creating an enriching user experience than with money. “In the early days Larry and Sergey spent more time talking about how they weren’t going to make money–no user registration, no blast e-mails, no banner advertising–than how they were,” says a participant in Google’s early discussions.
On Google’s website, under the heading “Ten things Google has found to be true,” one of the first principles is, “You can make money without doing evil. “. Cindy McCaffrey, Google’s marketing chief and an early employee says that this principle was respected “even at the expense of revenue,” Vision and Mission Statement Google’s mission statement is “to organize the world’s information and make it universally accessible and useful”. Google believes putting the needs of its users first is the most sustainable way of making profits.
Google does not need to invest huge amounts in marketing as the word-of-mouth promotion generates significant traffic. There are three key commitments towards the customer: •We will do our best to provide the most relevant and useful search results possible, independent of financial incentives. Our search results will be objective and we will not accept payment for inclusion or ranking in them. •We will do our best to provide the most relevant and useful advertising. Advertisements should not be an annoying interruption. If any element on a search result page is influenced by payment to us, we will make it clear to our users.
Page |4 Google Case Analysis E-Business Module 2010, RKC •We will never stop working to improve our user experience, our search technology and other important areas of information organization. Governance Structure The initial IPO for Google was made in 2004 at 85$ per share, and it came with an unusual letter from Larry Page that read: “Google is not a conventional company. We do not intend to become one”. • Dual-class equity structure, which will dilute investors’ influence over the company’s direction and will allow Google to concentrate on its core, long-term interest, despite fluctuations in quarterly results. Dual-class equity structure gives ten votes per share to holders of Class B stock, versus on vote per Class A share. • The top management trio would own, in aggregate, roughly one-third of Google’s shares but would control over 80% of shareholder votes. • In response to reservation’s from investors about Google’s unusual reliance on a top management trio, Page-cofounder- acknowledged that to facilitate timely decisions, the top management meet daily, decisions are often made by one of them with others being briefed later, and for important decisions they discuss the issue with the larger team.
Porter’s Five Forces 1)Bargaining Power of Suppliers: •Google is regionally not globally dominant. The company is very strong in US and Europe There are still territories where Google is partially or minimally used. •Competition Elimination and Substitution: Microsoft eats into Google’s market share by embedding their search tool into their Explorer browser. •Threat of forward integration – Google search could lose out to new software releases from Microsoft and Apple. ) Potential Entry of New Competitor •Yahoo ; Microsoft have radically improved their search engines and can on pass/deploy their search tool through their products. The companies were even about to merge as a measure to destroy Google’s search dominance. •There is no such thing as the perfect search engine – thus a better search engine invented by another will critically affect Google •
Governments are still new at the virtual space, online marketing and the rules governing what is good and bad practices are still evolving, which will affect Google’s current technology and philosophy. Switching costs are mostly related to hardware (storage of indices and speed of information return) and accuracy related (webbots/crawlers) •Search tools are easily scalable. Microsoft, AOL or Yahoo might come up with alternative data farms or satellite internet as such technology exists and was attempted before. Page |5 Google Case Analysis E-Business Module 2010, RKC )Rivalry Among Competing Firms: •Rules/ethics have not been defined so the environment is easily exploited or manipulated, especially with companies that are more ruthless and less idealistic than Google. •Currently there are only a few rivals (Microsoft, Yahoo, AOL) so the degree of rivalry is more oriented to an oligarchy – this could bring attention of trade commissions and governments of individual countries as a restriction internet activity in the future. Switching costs for most of the search tools are minimal, unless either one of the competitors maintains a huge technical gap- possible only though a complete technological leap such as the project “Teledesic”
•Brand identity is paramount – Google is integrated in the web dictionary as a noun and a verb •Search tools are also used without overt referencing, for instance eBay’s search tool is Google. •Improving on the search engine and its features is a significant task for a large number of highly skilled IT technologists, which is why Google is very carefully iring the most talented professionals from all types of domains who are working in open space offices to make communication and idea generation smooth and prompt. Even Mr. Schmidt shared his office for the first 6 months. 4)Threat of Substitutes: • The threat of substitutes are high switching costs are almost negligible •Buyer inclination to substitute is primarily driven by the experience that the engine provides: unfiltered results, speed and accuracy and also by the amount and relevance of ads that are included with the search results and pages. Users of the search tool are demanding more services and complexity or sophistication, such as personalization with the search tool to remain ‘loyal’ to its use. •Ad Revenue is directly related to use, even minor declines in traffic can mean significant advertising revenue losses.
•Technology requires extremely skilled staff – high degree of competition for a limited pool, which triggers technology companies to offer high perks to retain their professionals. This is also important to preserve trade secrets. )Buyer Power: •Use of the search rankings and their transparency is a significant leverage point by the owners of search tools in bargaining. • Any loss of ranking can lead to costly legal arguments – equivalent of e-defamation and loss of advertiser trust or even denial of services. • There is a lot of free advertising on the net, such as Facebook product pages. The users of the search tool are becoming more sophisticated and demanding and they want simple and uncomplicated methods to gauge their ROI on their advertising spent. •Substitutes are available at close price range and reach. There is little research still available on the impact and best methods to advertise on the net.
There are few companies researches and statistics who compare these Page |6 Google Case Analysis E-Business Module 2010, RKC competitors for online spent. Most of the research data is internally produced, hence it might be biased. SWOT Analysis: Strengths: • Google is the number one search engine and its brand is established and dependable. Google is among the top 10 brands in US and according to some studies, even top brand. • Google does not need to invest a lot in marketing as it benefits a lot from word of mouth. Google does not compromise on its speed on page loading for ad revenue. The company strives to blend advertising in the user experience in a useful and pleasant manner. • Google is very user friendly, the search results are comprehensive and do not confuse the users. • It provides services such as Groups, Email, News, Directory etc. and products like Hardware, Web products, software, mobiles, etc. Google announced in May 2010 its new product: Google TV. • Google’s cost of operations are low. The company uses UNIX web servers for indexing millions of web pages across internet.
Its servers are installed directly in shipping containers. At a conference in April 2009 , Google revealed the simple technology behind its servers: “Google’s big surprise: each server has its own 12-volt battery to supply power if there’s a problem with the main source of electricity. The company also revealed for the first time that since 2005, its data centers have been composed of standard shipping containers–each with 1,160 servers and a power consumption that can reach 250 kilowatts”. http://news. cnet. com/8301-1001_3-1020958092. html ) • Google has a ‘market capital of $185. 1 billion as per ‘Yahoo Finance’, Dec 5, 2009. • Google has a ‘war chest’ of $22 billion as per Adam Ostrow, Oct 15, 2009. • Google’s dominating position in the search field was cemented vey early. Google has already powered over 75% of the 300 million searches conducted daily in the U. S by 2003. and 300 million plus outside the U. S. • Google act global and thinks local. It’s web page are provided in 88 languages, including CJK – which makes it usable in different countries. • Google’s technology is constantly adapted and improved to index pages regularly in order to give most updated results to its users.
Google ‘s PageRank technology weighs the importance of pages to give its user access to most important pages first. AdWords and AdSense complete the advertising offerings. Page |7 Google Case Analysis E-Business Module 2010, RKC • Google is not biased towards advertisers. One cannot pay for improved ranking. All the sponsored links are clearly market on the right page side. Moreover, it also ranks sponsored links to keep most relevant sponsored links on the top. • Google has upgraded its search by offering “search by location” where users can get results showing vendors, products and services nearby their areas. Google also has a comprehensive product range including Images, Groups, Directory, and News. Google rather it kept tabs for these services on its homepage to keep the navigations simple and uncluttered. • Since the future is in mobile commerce, Google has also come up with solutions for wireless handheld devices, personalized toolbars, catalogues which are added essence strengths. • Google is improving continuously its talent pool by hiring PhDs who are continuously enhancing the search algorithms.
Weaknesses: • Google’s ranking algorithms made it attractive for spammers to manipulate Google’s PageRank technology by creating dummy sites with thousands of links to pages therefore depleting advertiser’s money • In rankings, actual traffic was not considered. • Google’s page ranking and cost per click methods are not easy to understand which leads to confusion among marketers • Google’s contextual advertising was not perceived to be impactful as arguably visitors interested in a page’s content are less ready to buy than searchers. • Contextual search and localized search algorithms need improvements as the results are many times erroneous. Google’s business model is complex, depending upon both google. com and mass market portals for its revenue. • Although Google is a dominating player among search engine websites, only 50% to 65% of web search queries are answered accurately by it. • Google doesn’t have highly personalized search by which it could charge users with switching cost if they decide to leave Google’s services. • Google did not manage to monetize Youtube
• Google does not have a strong presence in the social media- but it is trying • The data centers cost is getting higher and their reliability is easily threatened. Google has a weak strategy for contraction • Google’s integration of the various offerings isn’t homogenous enough. Opportunities • Google could track user behavior online, with permission and deliver personalized search results. Presently this is performed only on Google’s lateral platforms such as Youtube. Ultimately this would increase switching costs to other search engines. Page |8 Google Case Analysis E-Business Module 2010, RKC • Google has vast opportunities for reaching new groups/segments and reaching for new contents in new markets. Google could improve its content ranking to place better its contextual advertising. • Google could learn from its closest competitors like Yahoo and Microsoft and become a mass portal thus increasing users’ switching costs. It could also look at merging with an existing mass portal catering to user’s needs from a wider angle. • Google could take localized search one step further and add It can add localized vendors paid advertisements • Google can invest more in applications and services for mobile devices to increase its share in the mobile commerce market. Google can look at improved advertising services to increase its overall ad spending online.
• Google can target new acquisitions, especially in the area of weakness. • Google can increase the internet usage which will render the usage of google. com to be increased as well. Threats • Google needs to constantly monitor new technological advances and policies in the web indexing area ad it cannot afford to lose control of its main strength. • There are legal and political issued , including censorship in many markets render many services to be less effective or inconsistent with Google’s corporate philosophy. The market trend shows a certain disappearance of informational skills. • Google faces harsh competition from firms like Yahoo, MSN, AOL and in niche areas from eBay and Amazon. • Google faces legal trials that are eroding consumer confidence and are depleting its resources. • Google has sealed a contract with AOL for advertising placement but it may result in loss of considerable amount of revenue. • Google can’t lose pace of technical innovation. Technology becomes obsolete at and incredible rate of few months. Competitors can emerge with better interface and new ideas that may cause Google lose its market share.
Google needs to improve its cost-per-click mechanism and policies, to make them less confusing and marketer friendly in order to retain those advertising clients. • If Google opts to integrate its services and become a mass portal, it will lose its simple and user-friendly interface that is attracting its current users • Google may resolve to acquire information regarding its users’ personal information to deliver more personalized service, but the debate may take long since Google is keen on reaching consensus and adhering strictly to its corporate philosophy. To ensure its strength, Google may consider merging with one of its competitors, but then keeping its identity will become more problematic • Google’s advertising services rely heavily on its network members, which exposes Google to their weaknesses. • Google’s various services like Youtube, Google Books, Google News are notorious for having issues regarding the content ownership. Page |9 Google Case Analysis E-Business Module 2010, RKC Products According to some critics, Google is the company with its fingers in every pie.
Software PageRankIn 1998, they come up with new technique which called “PageRank”. PageRank denotes a site’s importance in the eyes of Google. PageRank’s thesis is that a webpage is important if it is pointed to by other important pages. Google Web Search Result Search results are ordered by their relevance to a user’s query, with the result Google considers most relevant source listed first. For every query, Google gives 10 – 12 different web links on each page. Each web link includes a Page title, URL, Scrape from page, Size of Page, Cached, Translate Page and Similar Pages.
The title of each web page found is displayed as a link to the actual page. If there is no title available for the webpage than the URL of the page is displayed as an alternative. Scrape from page is the summary information of the specific page. It will very helpful for user to choose which webpage is relevant for their search. Moreover, Similar Pages is a useful tool to find similar information or competing sites. The effectiveness of the Similar Pages feature can contrast widely from page to page and it works accurately.
Moreover, Google can translate pages into different languages using machine translation. Google also provides file type conversion which will convert any kind of format of file to HTML (Hyper Text Markup Language). Google makes is a mission to separate sponsored paid advertisements and these results are displayed on the right hand side. Some search engines mix up ads with their search results but Google keeps the two strictly separate. No company can pay Google to rank better in the search result. Even in the sponsored links, the companies that are more popular are placed on top of the list.
Google’s products span beyond web search nowadays. Its product offerings include Gmail, Google Maps. Google Books, Google Finance, Google Docs, Google Calendar, Google check-out and a lot more. Google also expanded in image search and Photo sharing- with Picasa and video with Youtube. Its advertising platform that has products like Adwords and AsSense was expanded by the acquisition on Doubleclick. Google Analytics generates easy to understand reports on the ad campaigns. Google’s omnipresence triggered a lot of comments on its strategy and intentions.
There is a clear tendency to turn Google into a portal similar to its competitors. Now Google offers mail (Gmail) financial advice (Goolge Finance), news (Google News) chat, which is also video enabled (Google Talk), shopping complete with payment solutions (Froogle + Google Check-out). Google started thus competing with e-shopping platforms like eBay and Amazon. Through its Google Pack– emailing, calendaring, document management systems it steps into the arena of Microsoft Office and Windows offerings. The Cloud P a g e | 10 Google Case Analysis E-Business Module 2010, RKC
The idea of cloud computing was also born as an independent project (for which Google employees are allowed to use 20% of their time). Christophe Bisciglia – a 27 year old software engineer at Google proposed it to Eric Schmidt in a rather informal manner and – typical of Google- Schmidt approved it. The project was called Google 101. IBM partnered with Google eventually and plugged Universities- at first- into the computing scale of a cloud. The concept spread beyond the media, into giant scientific research like the human genome and NASA projects.
Google seemed to become the world’s primary computer. The Google cloud is a network made of hundreds of thousands, or by some estimates 1 million, cheap servers, nearly over the counter technology. It stores huge amounts of data, including numerous copies of the World Wide Web which returns answers to queries in fractions of seconds. Google’s system behaves almost like a living creature whose cells are replaced and renewed: Google’s engineers replace its individual pieces with new, faster ones when they become damaged or obsolete.
Google offers its business solutions – Google Apps – based on Cloud support. The package, called Google Apps, combines programs for e-mail, instant messaging, calendars and Web page creation; with Google Docs and Spreadsheets, including programs to read and edit documents created with Microsoft Word and Excel, the mainstays of Microsoft Office, an $11 billion annual franchise. The cloud frees considerable resources in terms of server acquisition and maintenance, but poses the threat of privacy breach.
Android In conjunction with hardware and software companies like Texas Instruments, HTC, Intel, LG, Marvell Technology Group, Broadcom Corporation, nVidia, Qualcomm, Motorola, T-Mobile, Samsung Electronics and Sprint Nextel, Google formed the Open Handset Alliance and announced the Android platform built on the Linux kernel in 2007. Android’s evolved more rapidly and appeared in more shapes than any other Smartphone OS. Besides Google Maps Navigation Beta, Android 2. 0’s most significant upgrade for regular people is all about contacts and networking.
Like the Palm Pre and HTC’s Sense UI, it integrates contacts from multiple sources—namely, Facebook and Exchange, and other sources Android Market has over 10,000 apps. Google have recently launched an enhancement to their Google Voice mobile app for Android (and Blackberry) devices. The primary benefit afforded by the upgrade is faster calling. Google have decided to brand this feature “direct access numbers. ” Nexus One In Jan 2010 Google launches its first mobile phone that is using Android OS. The phone functions are very high tech and include the ability to transcribe voice to text.
The device was sold unlocked on North American and European markets. The phone did not generate a lot in interest. Google was selling it for 529 USD through an online store that it subsequently closed in July 2010 due to low interest. The phone is still sold through partners. Apple is already targeting Nexus One in a lawsuit against HTC. P a g e | 11 Google Case Analysis E-Business Module 2010, RKC Google Chrome Google describes its product as: “a browser that combines a minimal design with sophisticated technology to make the Web faster, safer, and easier.
Use one box for everything–type in the address bar and get suggestions for both search and Web pages. Thumbnails of your top sites let you access your favorite pages instantly with lightning speed from any new tab. Desktop shortcuts allow you to launch your favorite Web apps straight from your desktop. ” Chrome’s has reinvented the interface browsers. It has a nontraditional tool-bar, with the detachable tabs on top and has interchangeable “windows”. Detached tabs can be dragged and dropped into the browser, and tabs can be rearranged at any time.
By isolating each tab’s processes, when one site crashes, the other tabs do not. The “Omnibox,” fuses the search box and the address bar, so the browser makes suggestions for URLs from the browser’s history and search suggestions from a personal search engine. It remembers site-specific search engine results. There’s also Application Shortcuts, a feature that allows the user to create desktop icons for Webonly applications, such as Gmail. In the stealth mode, the browser does not create cookies and once can work with all of the extensions or just selected ones.
Google TV Google has announced this new venture on its site. In a press release, Google has stated that “Google TV is a new experience for television that combines the TV that you already know with the freedom and power of the Internet. With Google Chrome built in, you can access all of your favorite websites and easily move between television and the web. This opens up your TV from a few hundred channels to millions of channels of entertainment across TV and the web. Your television is also no longer confined to showing just video.
With the entire Internet in your living room, your TV becomes more than a TV — it can be a photo slideshow viewer, a gaming console, a music player and much more (…)We’re working together with Sony, Logitech and Intel to put Google TV inside of televisions, Blu-ray players and companion boxes. These devices will go on sale this fall, and will be available at Best Buy stores. ” (http://googleblog. blogspot. com/2010/05/announcing-google-tv-tv-meets-web-web. html) Strategy Google seems to be the emerging dominant company in the internet era.
Google has been able to maintain more than 60 percent of the internet search market which demonstrates their ability to be a great learning machine. Google employs scientists who are there to improve the relevance of the search results for their users and the efficiency of their advertising system for advertiser and publishers. “The source of P a g e | 12 Google Case Analysis E-Business Module 2010, RKC Google’s competitive advantage is learning by doing”, said Hae R. Varian, Google’s chief economist.
Google has learned from a new and powerful trend; organizing and learning from the petabytes of data it collects, large data sets that help to provide new insights that were not possible to accomplish in other ways. Google has taken over the advertising world without knowing very much about the culture or traditions of advertising. However, what Google did presume was that better data, with better analytical tools would make a difference and they were right. Google’s IT infrastructure was secret because it is part of its competitive advantage.
Google has up to 450,000 servers spread over 25 locations around the world. The servers use low cost hardware to run a customized version of Linux operating system and other critical pieces of custom software. Google has a very strong market position, a strong proprietary technology, and technological infrastructure along with AdWords and AdSense programs. Google’s philosophy is, we do not know why this page is better than that one. If statistics of incoming links say it is, that’s good enough. Google can translate languages without actually knowing the language.
They can also match ads to content without any knowledge or assumptions about the ad or content. Google is definitely about the values of technological innovation for their users. The PageRank algorithms that were initially developed by Larry Page and Sergery Brin interpret link to Web pages as “votes” of importance along with other algorithms that analyze the chain of hypertext links leading to focal sites. Google offers a much more superior way to search as opposed to the methods that search for primarily key words and their frequencies.
Although there is still room for improvement, Google is on the right track. Google is a great example of “network externalities” and increasing returns. The more users who come to Google for their searches, the more advertisers will come, the better the sponsored links become, the more revenues come into Google. Google has become more like Ebay or Amazon. com where users come to the site because of an indirect externality. The more users that go there, the more benefits the provider can offer to the users, without a technical lock in.
Google offers many new products and services such as: a searchable email program, a short messaging service for mobile wireless devices, a print service to search online books, an index of Web images as well as a service to view images from satellites, chat groups; a targeted news service, a catalog service that transfer printed catalogs into digital form, and Froogle, which is becoming one of the best tools to do price comparisons online. Google users can benefit from the many innovations from the Google portal.
However, the biggest concern is that Google is putting in so much time and money to things that have nothing to do with the advancement of their search technology. If Google wants to stay ahead of Yahoo, Microsoft, and the other newcomers, it should focus more on being the best search engine on earth. P a g e | 13 Google Case Analysis E-Business Module 2010, RKC What should Google do? 1. Mobile- improve customer service for its newly launched Nexus One product and future hardware products. 2. Search- conquer new territories, further personalize search 3.
Satelite broadband internet- Teledesic project 4. Cloud computing, capitalize on IaaS ( Infrastructure as a service) 1. Nexus one is a new product. It is far from perfect and in fact early adopters have complained about many of its features. This low interest in the product leads to Google having to close its online store. Google TV is on the way. These are physical products and Google has to preempt users needs for technical support by having a good network of service centers, either through partners or self owned. 2.
Google’s competitors have a much firmer hold on customers, argues Seth Godin, a well-known Internet consultant and editor of the widely distributed online book What Should Google Do? Competitors have troves of personal information about users that they draw on to customize products, ads, and services–consider the way My Yahoo brings you information on everything from your portfolio to fixing your house. They log information about users use that same information to tailor search results. Google, meanwhile, knows little more about you than what you are currently searching for.
Allegedly, the company does not store user’s information and this is attractive to users keen on privacy. This is one of the reasons why Google has chosen to revisit their decision to operate on the Chinese market. The Chinese government has imposed on Google to restrict and filter the returned search results, to not show politically sensitive results. Google has initially agreed- as it believed to choose the lesser of the 2 evils- not provide a superior search solution at all as opposed to providing a tailored version of it.
However, Google cannot ignore a market of 1. 3 billion users. Its competitors do not have the same problem. Companies like Microsoft and Yahoo can penetrate the market and make all the amends that the Chinese government and gain momentum with other offerings that do not involve internet- i. e. hardware, software. There was a proposed solution to avoid the Chinese Government censorship. At some point, Google was involved in the Teledesic that proposed in 1995 a fleet of 840 low orbiting satellites that provided broadband internet.
These were the reduced to 288 satellites and then scaled back because of lack of demand. Gogle’s competitorMicrosoft and even the Saudi Prince Alwaleed Bin Talal were involved in the projectthat was going to cost about 9 billion USD. The project was abandoned, but the technology exists and if implemented, Google can conquer China in spite of its government restrictions. P a g e | 14 Google Case Analysis E-Business Module 2010, RKC 4. There are three major cloud services: software as a service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS).
With SaaS the systems, security is controlled by the vendor and the customer controls is minimal. PaaS offers the possibility to create applications and load them onto the cloud infrastructure using programming languages and tools supported by the cloud service provider. With IaaS The customer is able to deploy and run arbitrary software, including operating systems and deployed applications. All these services are emerging and Google can grow its market share in cloud computing by targeting large corporations that have large scale projects which can measure up to Google’s large capacity.
Naturally, the profit margins in large projects are attractive and hence Google can turn this into a significant revenue stream.